Does Prohibition of Usury Influence Behavior of Bank Customers in Indonesia? - Ubaya Repository
CONFERENCE
PROCEEDINGS
ISBN 978-602-96319-3-7
CONFERENCE PROCEEDINGS
The 3rd International Conference on Business and Banking
SEKOLAH TINGGI ILMU EKONOMI (STIE) PERBANAS SURABAYA
SRIPATUM UNIVERSITY CHONBURI (SPUC)
Dusit Thani Hotel Pattaya, Thailand, 5 -7 February 2014
The 3rd ICBB Conference Proceedings
Published by:
STIE Perbanas Surabaya & Sripatum University Chonburi
ISBN 978-602-96319-3-7
Copyright@ICBB 2014
All right reserved. No part of this work may be reproduced in any form or by any
means without the written permission of the STIE Perbanas Surabaya & SPUC
Reviewers:
Prof. Dr. Dra.Psi. Tatik Suryani, MM.
Prof. Dr. Drs. R. Wilopo, M.Si., Ak
Dr. Muazaroh
Asst. Prof. Dr. Jiraporn Rahothan
Dr. Chonlatis Darawong
Assoc. Prof. Dr. Barbara Igel
Asst. Prof. Dr. Veera Bhapiasevi
Dr. Duc Ngoc Nguyen
Asst. Prof. Kamal Badar
Asst. Prof. Syed Abdulla Al Mamun
Dr. Sana-ur-Rehman
Asst. Prof. Dr. Qin Wei
Dr. Ralf Wilden
Prof. Amine Tarazi., PhD
Prof Dr Izah binti Mohd Tahir
Moderators :
Dr. Djuwari
Dr.Muazaroh
Asst. Prof. Dr. Jiraporn Rahothan
Dr. Chonlatis Darawong
: STIE Perbanas Surabaya, Indonesia
: STIE Perbanas Surabaya, Indonesia
: STIE Perbanas Surabaya, Indonesia
: Sripatum University Chonburi, Thailand
: Sripatum University Chonburi, Thailand
: School of Management, Asian Institute of Technology, Thailand
: Mahidol University International College, Thailand
: Banking University, Ho Chi Minh City, Vietnam
: Institute of Management Sciences, University of Balochistan,
Quetta, Pakistan.
: School of Business, North South University, Bangladesh.
: Institute of Management Sciences, Pakistan
: Guizhou University, Guiyang, Guizhou Province, People's
Republic of China
: School of Marketing, University of Technology, Sydney,
Australia
: University of Limoges, France
: University Sultan Zaenal Abidin-Trengganu, Malaysia
COMMITTEE
STIE Perbanas Surabaya
Advisor
Steering Committee
:
:
Head of the Committee
Secretary
Treasurer
:
:
:
Secreatriat staff
:
Conference Staff
:
Sponsorship Staff
Publication, Documentation,
Support
:
:
Prof. Dr. Tatik Suryani.
Dr. Sri Haryati.
Dra. Gunasti Hudiwinarsih, Ak., M.Si
Dra. Lindiawati., MM
Prof. Dr. R. Wilopo, CA, CFE.
Supriyati, SE., Ak., M.Si
Melilza Silvy, SE., M.Si
Dr. Soni Harsono.
Nurul Hasanah Uswatun Dewi, SE, Ak, M.Si
Dra. Tri Walijah
Aris Handayani, SE
Dr. Djuwari, (Coord)
Tri Suhartuti, S.S
Rahayu Winarti, A.Md
Burhanudin., SE, M.Si (Coord)
Triana Mayasari., SE, Ak., M.Si
Anggraeni., SE., M.Si (Coord)
Drs. Harry Widiantoro., M.Si
Sulistiono, B.Sc
Indrastuti Kusumaningtiyas, S.Sos
Sripatum University Chonburi Campus
Advisory chair
Steering committee
General Chair
Treasurers
Sponsorship staff
: Dr.Busaba Chaijinda
: Asst. Prof. Dr. Sutep Usaha
Asst. Prof. Dr. Siriluck Usaha
Asst. Prof. Dr. Jiraporn Rahothan
Dr. Chonlatis Darawong
: Asst. Prof. Dr. Siriluck Usaha
: Ms. Lukhana Kluinoree
Ms. Ampa Phuttaraksa
: Asst. Prof. Dr. Jiraporn Rahothan
Mr. Narin Panawas
FOREWORD
By Committee
At this event of The 1th International Conference on Business and Banking held together with STIE
Perbanas Surabaya and SPUC Thailand, we would like to express our appreciation to Prof. Dr.Tatik
Suryani STIE Perbanas Surabaya Rector and Dr.Busaba Chaijinda Vice President SPUC, and the
sponsors that support the conference.
This conference has been promoted around the universities worldwide and business organization in
Indonesia and Thailand, and there have been 105 abstract submitted and also full papers from different
countries namely Pakistan, Thailand, Taiwan, Vietnam, Philippines, Indonesia, the Netherlands, and
Nepal with totally 36 universities and business organizations.
The Theme of the conference is Business and Banking Value Reconstruction to Support
Competitiveness. The great event participants are also from both academicians and business
practitioners especially in banking industries.
This proceeding consists of 37 full papers including seven categories namely:
1. Marketing
2. Strategic Management
3. Human Resource Management
4. Banking and Finance
5. Accounting
6. Corporate Social Responsibility
7. Macro and Micro Economic
We would like to express our deep gratitude to the reviewers namely Prof. Dr.Tatik Suryani, Prof. Dr. R.
Wilopo, CA, CFE., Dr. Muazaroh ; Asst. Prof. Dr. Jiraporn Rahothan; Dr. Chonlatis Darawong; Assoc.
Prof. Dr. Barbara Igel; Asst. Prof. Dr. Veera Bhapiasevi; Dr. Duc Ngoc Nguyen; Asst. Prof. Kamal Badar;
Asst. Prof. Syed Abdulla Al Mamun; Dr. Sana-ur-Rehman; Asst. Prof. Dr. Qin Wei; Dr. Ralf Wilden; Prof.
Amine Tarazi., PhD; Prof Dr Izah binti Mohd Tahir.
PAPER PRESENTER ICBB 2014
Session I
Session II
Session III
Room 1 (Asst. Prof. Dr. Jiraporn Rahothan)
Room 1 (Asst. Prof. Dr. Jiraporn Rahothan)
Room 1 (Asst. Prof. Dr. Jiraporn Rahothan)
NO.
NO.
NAME
TITLE
FP
Research
NO.
Topic/
NO.
NAME
TITLE
FP
16 Diy ah Pujiati,
Hari Triono
Influence of Corporate Gov ernance
Accounting
22 Triana May asari,
Siska Amelia
Quality of Internal Audit in
Mechanisms and Firm
Nurul Hasanah
Improv ing the Detection of
Characteristics on the Disclosure
Usw ati Dew i
Earnings Management at the State-
34 Lilis Puspitaw ati, The Influence of User Ability to
NO.
NAME
Accounting
30 Gregorius Rudy
Topic/
26
Sriy ono
Antonio
4
5
7
Acceleration of Inv estment
Ow ned Enterprises
Accounting
2
79 Nirisha Basnet
Internal and Ex ternal Factor
Banking
2
5
Abdul Mongide Global Financial Crisis (GFC) ad
Affecting Commercial Banks
Islamic Banks Profitability :
Information Sy stems Research on
Profitability in Nepal
Ev idence From Selected Banks
3
55 Indra Saty a
Analy sis of Firm Size, Lev erage,
Accounting
3
24
Titis
Audit Quality Analy sis betw een
Prasav ita Amertha, Corporate Gov ernance on
Puspitaningrum Litigation Risks to the Earning
Fraud and Error Detections
I Gusti Ketut Agung Earnings Management Practices
Dew i Kartika ,
Ulupui, I Gusti Ay u (Indonesian Ev idence)
Joicenda
Kun-Li Lin , Anh Changes in Ow nership Structure
Finance
Tuan Doan ,
and Bank Efficiency in Asian
/Banking
Shuh-Chy i
Dev eloping Countries: the Role of
Doonga
Financial Freedom
The Role of Board of
Melly za Silv y
Commissioners and
Finance,
Banking
From Mena Countries
Accounting
Automated Audit Sy stems for
14 Lutfi, Iramani ,
Economics
through the Stabilization Money
Effectiv eness of Accounting
Regional Office
I
Continuous
Auditing
: Dev eloping
Research
Orientation
1
the Tax Office (LTO) in West Jav a
3
TITLE
FP
Orientation
1
of Intellectual Capital
2
NO.
Topic/
Orientation
1
Research
Made Asri Dw ija
17 Burhanudin,
4
Quratulain
Muslim and Islamic Banking in
Banking
4
Nahumury
Rini
75
Accounting
Management
The Effect of Audit Committee
Indonesia: When a Big Number
Role and SHARI’A Superv isory
does not Make a Big Account
Board Role on Financial
Management
Reporting Quality at Islamic
Banks In Indonesian
Banking
Transparency in Improv ing Bank
Operasional Efficiency and
PAPER PRESENTER ICBB 2014
Session I
Session II
Session III
Room 2 (Dr. Djuwari, M.Hum)
Room 2 (Dr. Muazaroh, SE, MT)
Room 2 (Dr. Muazaroh, SE, MT)
NO.
NO.
NAME
TITLE
FP
Research
NO.
Topic/
NO.
NAME
TITLE
FP
03 Amerilia Safitri
The Analy sis of Factors Affect the
Finance
NO.
Topic/
Orientation
1
Research
NO.
NAME
TITLE
FP
Topic/
Orientation
1
011
Adity a Mahardhika
How Corporate Gov ernance
Banking
Research
Orientation
Faizatul
The Determinant of Relationship
Ratings Bond Manufacturing
Affects the Performance of
1
18
Hiqmah, Tatik
Quality , in Banking Industries:
Company in Indonesia Stock
Commercial Banks in Indonesia
Sury ani
SME Perspectiv es
Innov ation &
Culture
Ex change
2
74 Indra Listy arti,
Tatik Sury ani
Determinant Factors of Inv estors
Finance
2
Behav ior in Inv estment Decision in
05 Lufi Yuw ana
Mursita
Indonesian Capital Market
Small-Medium Enterprises Going- Management
2
024 Wahy u Putri
Concern Financed By Islamic
Nurisma
Banks Credit In Indonesia
Accrual Earnings Management
Accounting
w ith Kothari Model on
Manufacture Company Listed in
Indonesia Stock Ex change
3
02 Firhat Robani
The Neglected Firm Effect Tow ard
Finance
3
52 Diana Suteja, Nur
Company Listed in Indonesia
Abnormal Return On Stock In
Izatur Rokhmaniah, stockEx changeThe Effect of
Indonesia Stock Ex change
Ry zkia Noor
Corporate Social Responsibility
Annisa
Disclosure to Financial
Finance
3
76
Ahmad S.
Quo Vaduz Regional Autonomy ,
Nuray a
Its Challenges and Opportunities
of Regional Budget
Performance of Manufacture
4
82 Muljanto
Moechdi
5
84 Herman
Gruenw ald
Supply and Demand Analy sis of
Finance
4
86 Arie Buijs
4
85 Isasias L Borres Phenomenon of Information
Micro Finance in Malang
Technology Productiv ity
Indonesia
Paradox
Logistic Softw are Generation -Y
Preception Study
Economics
PAPER PRESENTER ICBB 2014
Session I
Session II
Session III
Room 3 (Dr. Chonlatis Darawong)
Room 3 (Dr. Chonlatis Darawong)
Room 3 (Dr. Chonlatis Darawong)
NO.
NO.
NAME
TITLE
FP
Research
NO.
Topic/
NO.
NAME
TITLE
FP
35 Diana Aqmala,
Naili Farida
A Study Of Planned Impulsiv e
Marketing
NO.
Topic/
Orientation
1
Research
NO.
NAME
TITLE
FP
Topic/
Orientation
Designing Web-Based Financial
Information
Buy ing On Consumers In
1
65 Sasongko
Budisusety o,
Reporting: What Users Really
Technology
Indonesia
Luciana Spica
Want?
Research
Orientation
1
8
Kardison
Green-Based Product Innov ation,
Lumban Batu
Green Management Practices
Marketing
Green Corporate Image to
Almilia
Sustain Market Position and
Increase Marketing Performance
Large Scale Enterprises in
Indonesia
2
21 Sugeng Hariadi
Does Prohibition of Usury
Marketing
2
25 Ade Irma Anggraeni Psy chological Contract and
Human
Influence Behav ior of Bank
Employ ee Work Outcomes: The
Customers in Indonesia?
Role Informality Characteristics in Management
2
20
Resourches
Lalu Edy
Green Marketing: Challenges and
Herman
Opportunities on Green Banking
Muly ono
Consumers Purchasing Patterns
Indonesian Small and Medium
Marketing
in Indonesia
Enterprises (SME’s)
3
28 Ay u Lucky ,
Sriy ono
4
15 Wiw ik Lestari,
Ubud Salim
Implementation of Creativ e
Economics
3
59 Soetam Rizky
Modeling Budgeting
Apol Pribadi
Phenomenon of Information
Subriadi,
Technology Productiv ity
Serv ice Oriented Architecture in
Emanuel
Paradox on Rural Banking
Indonesia
Kristijadi
Economy to Improv e Performance
Wicaksono,
Transparency Framew ork using
Based Tourism
Soenartomo
Soepomo
Entrepreneurial Risk attitude and
confidence in gender perspectiv e
Management
4
3
Pongky Arie Wijay a Relationship Quality in Islamic
Bank: A Comparativ e Analy sis of
Moslem and Non Moslem
Consumers in Indonesia
Information
Management
Marketing
3
1
Banking
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
DOES PROHIBITION OF USURY INFLUENCE BEHAVIOR OF BANK
CUSTOMERS IN INDONESIA?
Sugeng Hariadi
Faculty of Business and Economics, Universitas Surabaya
e-mail: [email protected]
ABSTRACT
Islamic banks actually have tremendous market potential in Indonesia, especially after the
prohibition of usury was issued by the Indonesian Ulema Council (MUI) in 2004.
However, growth in market share of Islamic banks is always lower than the expected
target. This study analyzes the influence of usury laws on the behavior of bank customers
in Indonesia, especially on the decision making as an economic agent. Descriptive
statistics analysis tools used to discover and explain the behavior of bank customers when
choosing a bank, in the face of rising interest rates with other banks, and when informed
prohibition of bank interest (usury). Questionnaires were distributed to 141 respondents. It
was found that customers still choose conventional banks. The choice of a bank based on
the factors: the confidentiality of customer data is in a bank, a fast and efficient service,
and facilities on line between branches. The provision of feedback of information (about
the rise in interest rates at other banks) divides customers into two groups: loyal and
disloyal customers. Information of interest prohibition has significantly lowered the
amount of desire on the interest rate, to be at a normal rate of return. There is still a
customer credit and other banking services are interesting to study.
Key words: Islamic bank, usury, consumer behavior, normal rate of return.
INTRODUCTION
Discussion about the Islamic economy or financial system in Indonesia, has started since
1980 (Rival et al., 2007: 739). After the founding of Bank Muamalat in 1992 and became
the first Islamic bank in Indonesia, the dual banking and financial system is applied in
Indonesia. After the Indonesian Ulema Council (MUI) and other Islamic organizations
issued several fatwas related to the prohibition of bank interest from January 24, 2004,
Islamic banks are believed to have the potential to reach 200 million customers.
Especially coupled with the Christian religion as well prohibits usury, as well opened up
opportunities for the 20 million people become customers of Islamic banks.
By 2013, it turns out the market share of Islamic banks in Indonesia is still
relatively small (below 5%) than in the Middle East and Malaysia (above 20%). This is in
line with the findings of Ahmad and Haron (2002) and Erol and El-Bdour (1989) that does
not automatically demand for Islamic financial services is high in Muslim-majority
countries.
Gary S. Becker (Nobel economics laureate in 1992) and his students at the
University of Chicago, Laurence R. Iannaccone, find a causal relationship between
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
religion and economics (Barro and Mitchell, 2004). Religious economics has become a
scholar and bee used to explain the relationship between religion and behavior of
customer’s deposits, loans, or perhaps even to work in a bank.
Unlike in conventional banking, the study of consumer behavior in Islamic
banking is still very limited (Gait and Worthington, 2008). If any, the study of the
perceptions and behavior of individual customers of Islamic banking is still focusing on
banking institutions and not to the issue of religion or religiosity (Erol and El-Bdour, 1989
and 1990; Omer, 1992; Hegazy, 1995; Karim and Affif, 2005; Haron and Wan, 2005). In
fact, the relationship between religion and economics has became a fascinating topic of
some economists (Weber and Coy, 2004; Clayton, 2002). Religion and religious
institutions have been shown to influence economy (market) through a variety of ways
(Mittelstaedt, 2002). Stark et al. (1996) acknowledges that economists avoid religious
studies and social scientists have failed to understand the rationality of religion because of
a failure to put religion as a phenomenon in itself.
Thus, there is a gap such as there is a huge market potential in the largest Muslim
country in the world as well as the existing prohibition of bank interest of legal certainty
on the one hand, and the development of Islamic banks is still low in Indonesia on the
other. Therefore, it is interesting to study the attitudes, perceptions, and behaviors of
consumers towards Islamic banking. The focus of this study is to understand the influence
of legal presence in the form of bank interest and the fatwas of scholars and behavior of
bank customers in Indonesia. This is important because it will be a valuable input for
stakeholders of Islamic banking in formulating strategies more effective and efficient.
THEORITICAL FRAMEWORK AND HYPOTHESIS
Although the basis of the establishment of Islamic banks is a religion, but a few studies on
the behavior of customers still use the assumption that religion is not a key variable to
explain the phenomenon. This study specifically aimed to estimate the effect of the
prohibition of bank interest on the behavior of bank customers.
Similarities and differences in this study with previous studies can be stated as
follows. First, several studies have addressed the behavior of Islamic bank customers but
using the assumption that religion has not become the main variable to explain the
phenomenon (Haron et al., 1994; Metawa and Almossawi, 1998; Babakus et al., 2004;
Bank Indonesia, 2000; Almossawi, M., 2001; Al-Hawari, M. dan T. Ward, 2006). Even the
results of empirical studies in Jordan by Erol and El-Bdour (1989), expressed that the
people in Jordan are still oriented to the return or profit rather than religion in choosing a
bank. This study will make religion (prohibition of usury) as the main variable in
explaining the behavior of bank customers in Indonesia.
Secondly, there are several studies linking between religion and behavior, both
related to the economy or not, has been conducted by several researchers. McDaniel and
Burnett (1990) carried out a study of various aspects of religion and evaluative criteria of
customers for retail stores. Scheve and Stasavage (2005) conducted a review of the
relationship between religion and social insurance preferences. Reda (2005) reviewed the
empirical relationship between religious and economic preferences over the level of state
taxes in the United States. Meanwhile, Fernando (2005) discovered that religion plays an
important role in influencing the quality of decisions, emotions, and motivations or policy
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
decision making by leaders in Sri Lanka. Studies that uniquely relates over the religion
and consumer behavior-related products religion, in this case the Islamic bank deposit
products, such as has not been conducted in this study.
Third, by using the method of mail surveys, Chibnall et al., 2000, examined the
relationship between student religiosity and attitudes supporting faith-based curriculum.
Study of the relationship between religion and health is also performed by Seeman et al.
(2003). Heiman et al. (2005) carried out a study to determine the effect of religious
intensity to the consumption of food products. Furthermore, Smhueli and Tamir (2007)
also examined the relationship between healthy behaviors and religion among Israeli
Jews.
Thereby, this study will focus on the relationship between the prohibition of bank
interest and economic preferences, particularly the placement of funds in Indonesian
banks. This also expected to fill the void of literature. So far, studies carried out with too
ignore religion in the factor analysis.
The hypothesis tested in this study is twofold. First, consumer behavior leads to
the highest satisfaction. If there is an opportunity to acquire 'more income' in the form of
bank interest which increased significantly in other banks, customers are expected to
respond by moving their savings. Second, the purpose of the establishment of Islamic
banks is to provide an alternative financial institution that is free of usury. Riba is
absolutely forbidden. Information about the prohibition of usury is very important for
Muslim customers. Thereby, information about the prohibition of usury is suspected to
have a positive influence in changing the decision to place the funds in Islamic banks.
RESEARCH METHOD
This is a descriptive study and the data were collected to test hypotheses. Data obtained by
performing off-line survey (in computer lab). Respondents of this study were graduate
students of the Faculty of Economics and Business, Gadjah Mada University, which has a
savings account at 2011. According to Oakes (1972), the use of students as the sample is
still as valid as it would demonstrate a genuine phenomenon (the original), with the
characteristic of having a savings account because it fits the context of the study.
This study used a questionnaire that is planted in the computer network system, so
that respondents can fill out directly in front of the computer and can not be repeated.
Respondents were asked to behave as is appropriate practices and experiences associated
banking activities.
The first question is about saving habits all this time and consideration choosing a
bank. Next, respondents prompted to make a decision, if there is a change in the interest
rate and profit sharing of other banks. This is to understand the behavior of bank
customers when faced with the fact that there are other banks raise interest rates on
deposits significantly. Therefore, there will be two responses that may be taken by the
customer. There are not doing anything or move to a bank that gives high interest.
Subsequent, the respondents will be informed about the prohibition of usury released
by MUI and other religious organizations. Bank interest is usury and hence forbidden.
Respondents will be asked to demonstrate a response to information about the prohibition
of usury.Finally, respondents in requesting bank interest rate will be divided in three
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
variations: the above normal rate of return (NRR), right in the NRR, or under the NRR.
Many ulema stated that the interest under the NRR can still be considered halal.
DATA ANALYSES AND DISCUSSION
Based on the place of domicile, participants came from various regions in Indonesia: Java,
Sumatra, Kalimantan, Sulawesi, and Sumbawa. Based on the tribes of the elderly
participants, there are Javanese, Sundanese, Banjar, Flores, Minang, Bugis, Madurese,
Padang, Tolaki (Kendari), Dayak, and Sasak. By gender, 57 % of participants are divided
into men and the remaining 43 % of women. Based on the education level of the
household head, there are only 2 % of households in the senior high school education, 6 %
a diploma, 59 % undergraduate level (S1), and 33 % educated S2/S3. In terms of age, the
youngest participant was 21 and the oldest 48 years old with an average age of
respondents was 32 years.
Meanwhile, the occupation of head of the family participants, consisting of 43% of
government employees, members of the military/police as much as 4%, 26% private
sector employees and self-employed by 27%.
Specific observations about the ownership of accounts by participants in the bank,
either in the form of savings, current accounts, deposits, loans, or even credit cards, each
family member participant who has 1-2 accounts as much as 68%, have 3-4 accounts as
much as 23%, have 4-5 accounts by 4%, while having more than 5 accounts as much as
5%. Meanwhile, the participants themselves who have 1-2 accounts is as much as 32%,
have 3-4 accounts as much as 67%, have 4-5 accounts as much as 1%, and that has more
than 5 accounts are also only 1%.
There are three options for the placement of deposits by customers: doable in
conventional banks, Islamic banks, or a combination of both. The study shows that 62% of
customers stating only save money in conventional banks, only 18% of customers save
money in Islamic banks, and 20% of customers save money in the bank to combine
conventional and Islamic banks. Customers choose the bank with the main considerations:
confidentiality of customer data in the bank, which is fast and efficient service, and
facilities on line spheres.
The findings of this study, if there is information that there are other banks to raise
interest rates significantly shows that 81% of customers claimed not do anything (do not
move the savings). Meanwhile, the remaining 19% of customers said they would move
their savings. So there is a group of loyal customers (81%) and customers are not loyal
(19%).
Analysis of interest rate desired by customers loyal and disloyal after obtaining
information about the fatwas of scholars on bank interest law suggests that a decline in the
average interest rate in both groups desired (see Table 1). The decrease was almost the
same, namely to loyal customers is down on average amounted to 17.06% (from 32.00%
ask for an interest rate of 14.94% to just ask). As for customers who are not loyal, a
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
decline in the average bank interest desired by 17.95% (from requesting an interest rate of
35.98% to 18.04% just ask).
Table 1: Response Differences to the Riba Prohibition’s Fatwa
for Bank Customers
Statistical
Measurement
Average (Mean)
SD
Observations
Value of t (tstat)
t table (not
critical)
The value of p
(t)
Loyal Customer
Desired interest Desired interest
before
after
information of
information of
fatwa
fatwa
32,00
14,94
26,01
23,46
113
113
7,7421
Not Loyal Customers
Desired interest Desired interest
after
before
information of
information of
fatwa
fatwa
35,98
18,04
25,94
23,99
26
26
3,8891
1,9814
2,0595
0,0000
0,0007
For analysis of the group of loyal customers, it was found that the value of t stat (t)
= 7.7421> t table (t critical) = 1.9814 and p (t) = 0.0000 t table (t critical) = 2.0595 and p (t) = 0.0007
PROCEEDINGS
ISBN 978-602-96319-3-7
CONFERENCE PROCEEDINGS
The 3rd International Conference on Business and Banking
SEKOLAH TINGGI ILMU EKONOMI (STIE) PERBANAS SURABAYA
SRIPATUM UNIVERSITY CHONBURI (SPUC)
Dusit Thani Hotel Pattaya, Thailand, 5 -7 February 2014
The 3rd ICBB Conference Proceedings
Published by:
STIE Perbanas Surabaya & Sripatum University Chonburi
ISBN 978-602-96319-3-7
Copyright@ICBB 2014
All right reserved. No part of this work may be reproduced in any form or by any
means without the written permission of the STIE Perbanas Surabaya & SPUC
Reviewers:
Prof. Dr. Dra.Psi. Tatik Suryani, MM.
Prof. Dr. Drs. R. Wilopo, M.Si., Ak
Dr. Muazaroh
Asst. Prof. Dr. Jiraporn Rahothan
Dr. Chonlatis Darawong
Assoc. Prof. Dr. Barbara Igel
Asst. Prof. Dr. Veera Bhapiasevi
Dr. Duc Ngoc Nguyen
Asst. Prof. Kamal Badar
Asst. Prof. Syed Abdulla Al Mamun
Dr. Sana-ur-Rehman
Asst. Prof. Dr. Qin Wei
Dr. Ralf Wilden
Prof. Amine Tarazi., PhD
Prof Dr Izah binti Mohd Tahir
Moderators :
Dr. Djuwari
Dr.Muazaroh
Asst. Prof. Dr. Jiraporn Rahothan
Dr. Chonlatis Darawong
: STIE Perbanas Surabaya, Indonesia
: STIE Perbanas Surabaya, Indonesia
: STIE Perbanas Surabaya, Indonesia
: Sripatum University Chonburi, Thailand
: Sripatum University Chonburi, Thailand
: School of Management, Asian Institute of Technology, Thailand
: Mahidol University International College, Thailand
: Banking University, Ho Chi Minh City, Vietnam
: Institute of Management Sciences, University of Balochistan,
Quetta, Pakistan.
: School of Business, North South University, Bangladesh.
: Institute of Management Sciences, Pakistan
: Guizhou University, Guiyang, Guizhou Province, People's
Republic of China
: School of Marketing, University of Technology, Sydney,
Australia
: University of Limoges, France
: University Sultan Zaenal Abidin-Trengganu, Malaysia
COMMITTEE
STIE Perbanas Surabaya
Advisor
Steering Committee
:
:
Head of the Committee
Secretary
Treasurer
:
:
:
Secreatriat staff
:
Conference Staff
:
Sponsorship Staff
Publication, Documentation,
Support
:
:
Prof. Dr. Tatik Suryani.
Dr. Sri Haryati.
Dra. Gunasti Hudiwinarsih, Ak., M.Si
Dra. Lindiawati., MM
Prof. Dr. R. Wilopo, CA, CFE.
Supriyati, SE., Ak., M.Si
Melilza Silvy, SE., M.Si
Dr. Soni Harsono.
Nurul Hasanah Uswatun Dewi, SE, Ak, M.Si
Dra. Tri Walijah
Aris Handayani, SE
Dr. Djuwari, (Coord)
Tri Suhartuti, S.S
Rahayu Winarti, A.Md
Burhanudin., SE, M.Si (Coord)
Triana Mayasari., SE, Ak., M.Si
Anggraeni., SE., M.Si (Coord)
Drs. Harry Widiantoro., M.Si
Sulistiono, B.Sc
Indrastuti Kusumaningtiyas, S.Sos
Sripatum University Chonburi Campus
Advisory chair
Steering committee
General Chair
Treasurers
Sponsorship staff
: Dr.Busaba Chaijinda
: Asst. Prof. Dr. Sutep Usaha
Asst. Prof. Dr. Siriluck Usaha
Asst. Prof. Dr. Jiraporn Rahothan
Dr. Chonlatis Darawong
: Asst. Prof. Dr. Siriluck Usaha
: Ms. Lukhana Kluinoree
Ms. Ampa Phuttaraksa
: Asst. Prof. Dr. Jiraporn Rahothan
Mr. Narin Panawas
FOREWORD
By Committee
At this event of The 1th International Conference on Business and Banking held together with STIE
Perbanas Surabaya and SPUC Thailand, we would like to express our appreciation to Prof. Dr.Tatik
Suryani STIE Perbanas Surabaya Rector and Dr.Busaba Chaijinda Vice President SPUC, and the
sponsors that support the conference.
This conference has been promoted around the universities worldwide and business organization in
Indonesia and Thailand, and there have been 105 abstract submitted and also full papers from different
countries namely Pakistan, Thailand, Taiwan, Vietnam, Philippines, Indonesia, the Netherlands, and
Nepal with totally 36 universities and business organizations.
The Theme of the conference is Business and Banking Value Reconstruction to Support
Competitiveness. The great event participants are also from both academicians and business
practitioners especially in banking industries.
This proceeding consists of 37 full papers including seven categories namely:
1. Marketing
2. Strategic Management
3. Human Resource Management
4. Banking and Finance
5. Accounting
6. Corporate Social Responsibility
7. Macro and Micro Economic
We would like to express our deep gratitude to the reviewers namely Prof. Dr.Tatik Suryani, Prof. Dr. R.
Wilopo, CA, CFE., Dr. Muazaroh ; Asst. Prof. Dr. Jiraporn Rahothan; Dr. Chonlatis Darawong; Assoc.
Prof. Dr. Barbara Igel; Asst. Prof. Dr. Veera Bhapiasevi; Dr. Duc Ngoc Nguyen; Asst. Prof. Kamal Badar;
Asst. Prof. Syed Abdulla Al Mamun; Dr. Sana-ur-Rehman; Asst. Prof. Dr. Qin Wei; Dr. Ralf Wilden; Prof.
Amine Tarazi., PhD; Prof Dr Izah binti Mohd Tahir.
PAPER PRESENTER ICBB 2014
Session I
Session II
Session III
Room 1 (Asst. Prof. Dr. Jiraporn Rahothan)
Room 1 (Asst. Prof. Dr. Jiraporn Rahothan)
Room 1 (Asst. Prof. Dr. Jiraporn Rahothan)
NO.
NO.
NAME
TITLE
FP
Research
NO.
Topic/
NO.
NAME
TITLE
FP
16 Diy ah Pujiati,
Hari Triono
Influence of Corporate Gov ernance
Accounting
22 Triana May asari,
Siska Amelia
Quality of Internal Audit in
Mechanisms and Firm
Nurul Hasanah
Improv ing the Detection of
Characteristics on the Disclosure
Usw ati Dew i
Earnings Management at the State-
34 Lilis Puspitaw ati, The Influence of User Ability to
NO.
NAME
Accounting
30 Gregorius Rudy
Topic/
26
Sriy ono
Antonio
4
5
7
Acceleration of Inv estment
Ow ned Enterprises
Accounting
2
79 Nirisha Basnet
Internal and Ex ternal Factor
Banking
2
5
Abdul Mongide Global Financial Crisis (GFC) ad
Affecting Commercial Banks
Islamic Banks Profitability :
Information Sy stems Research on
Profitability in Nepal
Ev idence From Selected Banks
3
55 Indra Saty a
Analy sis of Firm Size, Lev erage,
Accounting
3
24
Titis
Audit Quality Analy sis betw een
Prasav ita Amertha, Corporate Gov ernance on
Puspitaningrum Litigation Risks to the Earning
Fraud and Error Detections
I Gusti Ketut Agung Earnings Management Practices
Dew i Kartika ,
Ulupui, I Gusti Ay u (Indonesian Ev idence)
Joicenda
Kun-Li Lin , Anh Changes in Ow nership Structure
Finance
Tuan Doan ,
and Bank Efficiency in Asian
/Banking
Shuh-Chy i
Dev eloping Countries: the Role of
Doonga
Financial Freedom
The Role of Board of
Melly za Silv y
Commissioners and
Finance,
Banking
From Mena Countries
Accounting
Automated Audit Sy stems for
14 Lutfi, Iramani ,
Economics
through the Stabilization Money
Effectiv eness of Accounting
Regional Office
I
Continuous
Auditing
: Dev eloping
Research
Orientation
1
the Tax Office (LTO) in West Jav a
3
TITLE
FP
Orientation
1
of Intellectual Capital
2
NO.
Topic/
Orientation
1
Research
Made Asri Dw ija
17 Burhanudin,
4
Quratulain
Muslim and Islamic Banking in
Banking
4
Nahumury
Rini
75
Accounting
Management
The Effect of Audit Committee
Indonesia: When a Big Number
Role and SHARI’A Superv isory
does not Make a Big Account
Board Role on Financial
Management
Reporting Quality at Islamic
Banks In Indonesian
Banking
Transparency in Improv ing Bank
Operasional Efficiency and
PAPER PRESENTER ICBB 2014
Session I
Session II
Session III
Room 2 (Dr. Djuwari, M.Hum)
Room 2 (Dr. Muazaroh, SE, MT)
Room 2 (Dr. Muazaroh, SE, MT)
NO.
NO.
NAME
TITLE
FP
Research
NO.
Topic/
NO.
NAME
TITLE
FP
03 Amerilia Safitri
The Analy sis of Factors Affect the
Finance
NO.
Topic/
Orientation
1
Research
NO.
NAME
TITLE
FP
Topic/
Orientation
1
011
Adity a Mahardhika
How Corporate Gov ernance
Banking
Research
Orientation
Faizatul
The Determinant of Relationship
Ratings Bond Manufacturing
Affects the Performance of
1
18
Hiqmah, Tatik
Quality , in Banking Industries:
Company in Indonesia Stock
Commercial Banks in Indonesia
Sury ani
SME Perspectiv es
Innov ation &
Culture
Ex change
2
74 Indra Listy arti,
Tatik Sury ani
Determinant Factors of Inv estors
Finance
2
Behav ior in Inv estment Decision in
05 Lufi Yuw ana
Mursita
Indonesian Capital Market
Small-Medium Enterprises Going- Management
2
024 Wahy u Putri
Concern Financed By Islamic
Nurisma
Banks Credit In Indonesia
Accrual Earnings Management
Accounting
w ith Kothari Model on
Manufacture Company Listed in
Indonesia Stock Ex change
3
02 Firhat Robani
The Neglected Firm Effect Tow ard
Finance
3
52 Diana Suteja, Nur
Company Listed in Indonesia
Abnormal Return On Stock In
Izatur Rokhmaniah, stockEx changeThe Effect of
Indonesia Stock Ex change
Ry zkia Noor
Corporate Social Responsibility
Annisa
Disclosure to Financial
Finance
3
76
Ahmad S.
Quo Vaduz Regional Autonomy ,
Nuray a
Its Challenges and Opportunities
of Regional Budget
Performance of Manufacture
4
82 Muljanto
Moechdi
5
84 Herman
Gruenw ald
Supply and Demand Analy sis of
Finance
4
86 Arie Buijs
4
85 Isasias L Borres Phenomenon of Information
Micro Finance in Malang
Technology Productiv ity
Indonesia
Paradox
Logistic Softw are Generation -Y
Preception Study
Economics
PAPER PRESENTER ICBB 2014
Session I
Session II
Session III
Room 3 (Dr. Chonlatis Darawong)
Room 3 (Dr. Chonlatis Darawong)
Room 3 (Dr. Chonlatis Darawong)
NO.
NO.
NAME
TITLE
FP
Research
NO.
Topic/
NO.
NAME
TITLE
FP
35 Diana Aqmala,
Naili Farida
A Study Of Planned Impulsiv e
Marketing
NO.
Topic/
Orientation
1
Research
NO.
NAME
TITLE
FP
Topic/
Orientation
Designing Web-Based Financial
Information
Buy ing On Consumers In
1
65 Sasongko
Budisusety o,
Reporting: What Users Really
Technology
Indonesia
Luciana Spica
Want?
Research
Orientation
1
8
Kardison
Green-Based Product Innov ation,
Lumban Batu
Green Management Practices
Marketing
Green Corporate Image to
Almilia
Sustain Market Position and
Increase Marketing Performance
Large Scale Enterprises in
Indonesia
2
21 Sugeng Hariadi
Does Prohibition of Usury
Marketing
2
25 Ade Irma Anggraeni Psy chological Contract and
Human
Influence Behav ior of Bank
Employ ee Work Outcomes: The
Customers in Indonesia?
Role Informality Characteristics in Management
2
20
Resourches
Lalu Edy
Green Marketing: Challenges and
Herman
Opportunities on Green Banking
Muly ono
Consumers Purchasing Patterns
Indonesian Small and Medium
Marketing
in Indonesia
Enterprises (SME’s)
3
28 Ay u Lucky ,
Sriy ono
4
15 Wiw ik Lestari,
Ubud Salim
Implementation of Creativ e
Economics
3
59 Soetam Rizky
Modeling Budgeting
Apol Pribadi
Phenomenon of Information
Subriadi,
Technology Productiv ity
Serv ice Oriented Architecture in
Emanuel
Paradox on Rural Banking
Indonesia
Kristijadi
Economy to Improv e Performance
Wicaksono,
Transparency Framew ork using
Based Tourism
Soenartomo
Soepomo
Entrepreneurial Risk attitude and
confidence in gender perspectiv e
Management
4
3
Pongky Arie Wijay a Relationship Quality in Islamic
Bank: A Comparativ e Analy sis of
Moslem and Non Moslem
Consumers in Indonesia
Information
Management
Marketing
3
1
Banking
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
DOES PROHIBITION OF USURY INFLUENCE BEHAVIOR OF BANK
CUSTOMERS IN INDONESIA?
Sugeng Hariadi
Faculty of Business and Economics, Universitas Surabaya
e-mail: [email protected]
ABSTRACT
Islamic banks actually have tremendous market potential in Indonesia, especially after the
prohibition of usury was issued by the Indonesian Ulema Council (MUI) in 2004.
However, growth in market share of Islamic banks is always lower than the expected
target. This study analyzes the influence of usury laws on the behavior of bank customers
in Indonesia, especially on the decision making as an economic agent. Descriptive
statistics analysis tools used to discover and explain the behavior of bank customers when
choosing a bank, in the face of rising interest rates with other banks, and when informed
prohibition of bank interest (usury). Questionnaires were distributed to 141 respondents. It
was found that customers still choose conventional banks. The choice of a bank based on
the factors: the confidentiality of customer data is in a bank, a fast and efficient service,
and facilities on line between branches. The provision of feedback of information (about
the rise in interest rates at other banks) divides customers into two groups: loyal and
disloyal customers. Information of interest prohibition has significantly lowered the
amount of desire on the interest rate, to be at a normal rate of return. There is still a
customer credit and other banking services are interesting to study.
Key words: Islamic bank, usury, consumer behavior, normal rate of return.
INTRODUCTION
Discussion about the Islamic economy or financial system in Indonesia, has started since
1980 (Rival et al., 2007: 739). After the founding of Bank Muamalat in 1992 and became
the first Islamic bank in Indonesia, the dual banking and financial system is applied in
Indonesia. After the Indonesian Ulema Council (MUI) and other Islamic organizations
issued several fatwas related to the prohibition of bank interest from January 24, 2004,
Islamic banks are believed to have the potential to reach 200 million customers.
Especially coupled with the Christian religion as well prohibits usury, as well opened up
opportunities for the 20 million people become customers of Islamic banks.
By 2013, it turns out the market share of Islamic banks in Indonesia is still
relatively small (below 5%) than in the Middle East and Malaysia (above 20%). This is in
line with the findings of Ahmad and Haron (2002) and Erol and El-Bdour (1989) that does
not automatically demand for Islamic financial services is high in Muslim-majority
countries.
Gary S. Becker (Nobel economics laureate in 1992) and his students at the
University of Chicago, Laurence R. Iannaccone, find a causal relationship between
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
religion and economics (Barro and Mitchell, 2004). Religious economics has become a
scholar and bee used to explain the relationship between religion and behavior of
customer’s deposits, loans, or perhaps even to work in a bank.
Unlike in conventional banking, the study of consumer behavior in Islamic
banking is still very limited (Gait and Worthington, 2008). If any, the study of the
perceptions and behavior of individual customers of Islamic banking is still focusing on
banking institutions and not to the issue of religion or religiosity (Erol and El-Bdour, 1989
and 1990; Omer, 1992; Hegazy, 1995; Karim and Affif, 2005; Haron and Wan, 2005). In
fact, the relationship between religion and economics has became a fascinating topic of
some economists (Weber and Coy, 2004; Clayton, 2002). Religion and religious
institutions have been shown to influence economy (market) through a variety of ways
(Mittelstaedt, 2002). Stark et al. (1996) acknowledges that economists avoid religious
studies and social scientists have failed to understand the rationality of religion because of
a failure to put religion as a phenomenon in itself.
Thus, there is a gap such as there is a huge market potential in the largest Muslim
country in the world as well as the existing prohibition of bank interest of legal certainty
on the one hand, and the development of Islamic banks is still low in Indonesia on the
other. Therefore, it is interesting to study the attitudes, perceptions, and behaviors of
consumers towards Islamic banking. The focus of this study is to understand the influence
of legal presence in the form of bank interest and the fatwas of scholars and behavior of
bank customers in Indonesia. This is important because it will be a valuable input for
stakeholders of Islamic banking in formulating strategies more effective and efficient.
THEORITICAL FRAMEWORK AND HYPOTHESIS
Although the basis of the establishment of Islamic banks is a religion, but a few studies on
the behavior of customers still use the assumption that religion is not a key variable to
explain the phenomenon. This study specifically aimed to estimate the effect of the
prohibition of bank interest on the behavior of bank customers.
Similarities and differences in this study with previous studies can be stated as
follows. First, several studies have addressed the behavior of Islamic bank customers but
using the assumption that religion has not become the main variable to explain the
phenomenon (Haron et al., 1994; Metawa and Almossawi, 1998; Babakus et al., 2004;
Bank Indonesia, 2000; Almossawi, M., 2001; Al-Hawari, M. dan T. Ward, 2006). Even the
results of empirical studies in Jordan by Erol and El-Bdour (1989), expressed that the
people in Jordan are still oriented to the return or profit rather than religion in choosing a
bank. This study will make religion (prohibition of usury) as the main variable in
explaining the behavior of bank customers in Indonesia.
Secondly, there are several studies linking between religion and behavior, both
related to the economy or not, has been conducted by several researchers. McDaniel and
Burnett (1990) carried out a study of various aspects of religion and evaluative criteria of
customers for retail stores. Scheve and Stasavage (2005) conducted a review of the
relationship between religion and social insurance preferences. Reda (2005) reviewed the
empirical relationship between religious and economic preferences over the level of state
taxes in the United States. Meanwhile, Fernando (2005) discovered that religion plays an
important role in influencing the quality of decisions, emotions, and motivations or policy
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
decision making by leaders in Sri Lanka. Studies that uniquely relates over the religion
and consumer behavior-related products religion, in this case the Islamic bank deposit
products, such as has not been conducted in this study.
Third, by using the method of mail surveys, Chibnall et al., 2000, examined the
relationship between student religiosity and attitudes supporting faith-based curriculum.
Study of the relationship between religion and health is also performed by Seeman et al.
(2003). Heiman et al. (2005) carried out a study to determine the effect of religious
intensity to the consumption of food products. Furthermore, Smhueli and Tamir (2007)
also examined the relationship between healthy behaviors and religion among Israeli
Jews.
Thereby, this study will focus on the relationship between the prohibition of bank
interest and economic preferences, particularly the placement of funds in Indonesian
banks. This also expected to fill the void of literature. So far, studies carried out with too
ignore religion in the factor analysis.
The hypothesis tested in this study is twofold. First, consumer behavior leads to
the highest satisfaction. If there is an opportunity to acquire 'more income' in the form of
bank interest which increased significantly in other banks, customers are expected to
respond by moving their savings. Second, the purpose of the establishment of Islamic
banks is to provide an alternative financial institution that is free of usury. Riba is
absolutely forbidden. Information about the prohibition of usury is very important for
Muslim customers. Thereby, information about the prohibition of usury is suspected to
have a positive influence in changing the decision to place the funds in Islamic banks.
RESEARCH METHOD
This is a descriptive study and the data were collected to test hypotheses. Data obtained by
performing off-line survey (in computer lab). Respondents of this study were graduate
students of the Faculty of Economics and Business, Gadjah Mada University, which has a
savings account at 2011. According to Oakes (1972), the use of students as the sample is
still as valid as it would demonstrate a genuine phenomenon (the original), with the
characteristic of having a savings account because it fits the context of the study.
This study used a questionnaire that is planted in the computer network system, so
that respondents can fill out directly in front of the computer and can not be repeated.
Respondents were asked to behave as is appropriate practices and experiences associated
banking activities.
The first question is about saving habits all this time and consideration choosing a
bank. Next, respondents prompted to make a decision, if there is a change in the interest
rate and profit sharing of other banks. This is to understand the behavior of bank
customers when faced with the fact that there are other banks raise interest rates on
deposits significantly. Therefore, there will be two responses that may be taken by the
customer. There are not doing anything or move to a bank that gives high interest.
Subsequent, the respondents will be informed about the prohibition of usury released
by MUI and other religious organizations. Bank interest is usury and hence forbidden.
Respondents will be asked to demonstrate a response to information about the prohibition
of usury.Finally, respondents in requesting bank interest rate will be divided in three
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
variations: the above normal rate of return (NRR), right in the NRR, or under the NRR.
Many ulema stated that the interest under the NRR can still be considered halal.
DATA ANALYSES AND DISCUSSION
Based on the place of domicile, participants came from various regions in Indonesia: Java,
Sumatra, Kalimantan, Sulawesi, and Sumbawa. Based on the tribes of the elderly
participants, there are Javanese, Sundanese, Banjar, Flores, Minang, Bugis, Madurese,
Padang, Tolaki (Kendari), Dayak, and Sasak. By gender, 57 % of participants are divided
into men and the remaining 43 % of women. Based on the education level of the
household head, there are only 2 % of households in the senior high school education, 6 %
a diploma, 59 % undergraduate level (S1), and 33 % educated S2/S3. In terms of age, the
youngest participant was 21 and the oldest 48 years old with an average age of
respondents was 32 years.
Meanwhile, the occupation of head of the family participants, consisting of 43% of
government employees, members of the military/police as much as 4%, 26% private
sector employees and self-employed by 27%.
Specific observations about the ownership of accounts by participants in the bank,
either in the form of savings, current accounts, deposits, loans, or even credit cards, each
family member participant who has 1-2 accounts as much as 68%, have 3-4 accounts as
much as 23%, have 4-5 accounts by 4%, while having more than 5 accounts as much as
5%. Meanwhile, the participants themselves who have 1-2 accounts is as much as 32%,
have 3-4 accounts as much as 67%, have 4-5 accounts as much as 1%, and that has more
than 5 accounts are also only 1%.
There are three options for the placement of deposits by customers: doable in
conventional banks, Islamic banks, or a combination of both. The study shows that 62% of
customers stating only save money in conventional banks, only 18% of customers save
money in Islamic banks, and 20% of customers save money in the bank to combine
conventional and Islamic banks. Customers choose the bank with the main considerations:
confidentiality of customer data in the bank, which is fast and efficient service, and
facilities on line spheres.
The findings of this study, if there is information that there are other banks to raise
interest rates significantly shows that 81% of customers claimed not do anything (do not
move the savings). Meanwhile, the remaining 19% of customers said they would move
their savings. So there is a group of loyal customers (81%) and customers are not loyal
(19%).
Analysis of interest rate desired by customers loyal and disloyal after obtaining
information about the fatwas of scholars on bank interest law suggests that a decline in the
average interest rate in both groups desired (see Table 1). The decrease was almost the
same, namely to loyal customers is down on average amounted to 17.06% (from 32.00%
ask for an interest rate of 14.94% to just ask). As for customers who are not loyal, a
The 3rd International Conference on Business and Banking (ICBB 2014)
Pattaya, Thailand-February 5-7, 2014
ISBN: 978-60293193-7
decline in the average bank interest desired by 17.95% (from requesting an interest rate of
35.98% to 18.04% just ask).
Table 1: Response Differences to the Riba Prohibition’s Fatwa
for Bank Customers
Statistical
Measurement
Average (Mean)
SD
Observations
Value of t (tstat)
t table (not
critical)
The value of p
(t)
Loyal Customer
Desired interest Desired interest
before
after
information of
information of
fatwa
fatwa
32,00
14,94
26,01
23,46
113
113
7,7421
Not Loyal Customers
Desired interest Desired interest
after
before
information of
information of
fatwa
fatwa
35,98
18,04
25,94
23,99
26
26
3,8891
1,9814
2,0595
0,0000
0,0007
For analysis of the group of loyal customers, it was found that the value of t stat (t)
= 7.7421> t table (t critical) = 1.9814 and p (t) = 0.0000 t table (t critical) = 2.0595 and p (t) = 0.0007